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Google Acquires Motorola For $12.5 Billion

It’s a 60% premium over Motorola’s actual trading price. Here are a few quotes from company officers:

Larry Page, CEO of Google, said, “Motorola Mobility’s total commitment to Android has created a natural fit for our two companies. Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers. I look forward to welcoming Motorolans to our family of Googlers.”

Sanjay Jha, CEO of Motorola Mobility, said, “This transaction offers significant value for Motorola Mobility’s stockholders and provides compelling new opportunities for our employees, customers, and partners around the world. We have shared a productive partnership with Google to advance the Android platform, and now through this combination we will be able to do even more to innovate and deliver outstanding mobility solutions across our mobile devices and home businesses.”

Andy Rubin, Senior Vice President of Mobile at Google, said, “We expect that this combination will enable us to break new ground for the Android ecosystem. However, our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community. We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices.”

Also:

The acquisition of Motorola Mobility, a dedicated Android partner, will enable Google to supercharge the Android ecosystem and will enhance competition in mobile computing. Motorola Mobility will remain a licensee of Android and Android will remain open. Google will run Motorola Mobility as a separate business.

The majority of news stories are not mentioning it, but this move is about one thing in my view:

The iPhone

The market share of Android devices has grown at a rapid pace. It was aided in large part by AT&T and Apple who had an exclusive deal. But this year saw the move to a second provider and Verizon customers who have been patiently waiting for the iPhone to hit that platform were rewarded this spring.

Verizon iPhone sales have not been as robust as Verizon and Apple would like, but I suspect some of that has to do with the impending release of the iPhone 5.

People are waiting.

Google has gone all-in with its Android OS and this move shows just how much they are committed to remaning a powerful force in the handheld marketplace.

Jay Caruso

I am photographer. I love my wife and kids immensely. I have a personal relationship with Jesus Christ, my Savior. I was an IT Director and Project Manager for 10 years. Now I am a Senior Logistics Analyst at The Home Depot. I love the sport of baseball and the New York Yankees.

Totally agree with your asessment of the Google/Motorola deal.The price Google was willing to pay for Motorola says it all; Google wants to be a dominating force in the hand held market; I think they are willing to pay well to make it happen as quickly as possible. iPhone 5 is coming out in September. Will this move on the part of Google cause potential iPhone purchasers to wait for Google’s product, and thus cut into Apple’s money pie? Could be.

This purchase wasn’t about Google vs. Apple so much as about MMI’s 17,000 patents. By gaining that much IP Google has a lot more weight to throw around. Google in no way is interested in becoming a manufacturer; the cost to profit ratio is much too small. Google will most likely spin the manufacturing off. The fact that they will run MMI as a separate business says a lot toward this plan. Google probably looked over its primary handset providers and picked the one with the best patents to get some of the lawsuits off their back. As it stands, Oracle’s is still the largest threat, and a few of Motorola’s may contain some gems needed to fight back. This is a great strategic move by Google in the long run but this is also not about creating a more competitive market as implied. It gives Google more leverage against other Android handset developers and can allow them to be an even bigger bully.